In today’s briefing:
- Gushengtang (2273.HK) – The Development Momentum Is Good, but There Are Also Challenges
- Gland Pharma – Multiple Levers at Play; Valuations Attractive
Gushengtang (2273.HK) – The Development Momentum Is Good, but There Are Also Challenges
- Through perfect partnership system, Gushengtang locks in the scarce TCM physicians, and then quickly establishes/merges offline medical institutions to occupy the market. Such development mode works well so far.
- The challenges are the risks of losing talents to competitors and the weak sales of healthcare products leading to lower profitability.
- Gushengtang is in an industry that receives government encouragement/preferential policies. The 2022 revenue growth forecast could fall back to about 25% considering the pandemic/lockdown. The EPS could narrowly turn positive.
Gland Pharma – Multiple Levers at Play; Valuations Attractive
- After delivering 27% earnings CAGR over FY17-22, GLAND is well-placed to sustain its earnings growth momentum over the next three-to-five years
- It has been enhancing its offerings by adding complex products to its portfolio, scaling the product at the global level, expanding capacity to aid manufacturing, as well as increased backward integration.
- While constraints on availability of certain materials may hinder performance over the near term, GLAND is in good stead for consistent performance over the next three-to-five years.
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